COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-11-00285-CV
GREGORY EARL REED D/B/A HIT APPELLANT
CITY RECORDS & TAPES
V.
COUNTY OF TARRANT, TARRANT APPELLEES
COUNTY HOSPITAL DISTRICT,
TARRANT COUNTY COMMUNITY
COLLEGE DISTRICT, CITY OF
FOREST HILL, AND FORT WORTH
INDEPENDENT SCHOOL
DISTRICT
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FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION1
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See Tex. R. App. P. 47.4.
I. INTRODUCTION
Appellant Gregory Earl Reed d/b/a Hit City Records & Tapes appeals the
trial court’s order denying his equitable bill of review challenging a default
judgment for delinquent property taxes, foreclosure of a tax lien, and a tax-
foreclosure sale in favor of Appellees County of Tarrant, Tarrant County Hospital
District, Tarrant County Community College District, City of Forrest Hill, and Fort
Worth Independent School District. We will affirm.
II. BACKGROUND
Appellees sued Hit City in March 2004 to recover delinquent ad valorem
taxes for property owned at 3354 Mansfield Highway in Forrest Hill. The return
of citation indicates that Gregory’s brother, Ronald Reed, the “Registered Agent”
for Hit City, was served with citation and a copy of the original petition on
August 30, 2004. Several years later, in May 2008, Appellees obtained a default
judgment against Hit City for $17,846.12. The property was later sold in
accordance with the Texas Tax Code, and the proceeds were used to satisfy the
judgment for delinquent taxes.
In January 2009, Gregory filed a bill of review against Appellees. He
alleged that neither he nor Ronald “were ever served with citation or with any
pleading or with any other notice of the lawsuit” for delinquent taxes and that
even if Ronald had been served, “such service would have been ineffective
service upon” Gregory. Gregory prayed for a new trial and that the default
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judgment be set aside and vacated. After a hearing, the trial court denied the bill
of review and entered several findings of fact, including the following:
11. Court records indicate that Ronald Reed as a partner in Hit
City Records & Tapes [was] served with legal process in connection
with Defendants’ tax suit on August 30, 2004.
The trial court entered the following conclusions of law, among others:
4. Plaintiff Hit City Records & Tapes was served with process by
serving its named partner, Ronald Reed, in person on August 30,
2004, an appropriate return of citation having been filed with the
Court on September 1, 2004, signed by the Constable.
5. At the time of service, Ronald Reed was a registered partner
in the partnership known as Hit City Records & Tapes, no
modification of the partnership having been appropriately filed.
6. Defendants, having served a named partner of the
partnership, gave sufficient due process and notice to Plaintiff to
proceed to judgment.
....
11. Plaintiff, at trial in testimony on a bill of review, failed to
provide corroborating evidence sufficient to overcome the
presumption that Plaintiff was served.
III. SERVICE UPON RONALD
In his first issue, Gregory argues that the trial court abused its discretion by
denying the bill of review. He acknowledges that “the citation appears to contain
all the elements of a valid return of citation,” but he contends that the evidence is
factually insufficient to show that Ronald was served because the evidence
sufficiently corroborated Ronald’s testimony that he was not served.
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A bill of review is an equitable proceeding to set aside a judgment that is
no longer appealable or subject to a motion for new trial. Transworld Fin. Servs.
Corp. v. Briscoe, 722 S.W.2d 407, 407 (Tex. 1987). The bill of review petitioner
must ordinarily plead and prove (1) a meritorious defense to the cause of action
supporting the judgment (2) that he was prevented from making by the fraud,
accident, or wrongful act of the opposing party (3) unmixed with any fault or
negligence of his own. Id. at 407–08. But when the petitioner alleges that he did
not receive proper service of citation, he need only prove a lack of proper service
to be entitled to a new trial. Ross v. Nat’l Ctr. for the Emp’t of the Disabled, 197
S.W.3d 795, 797 (Tex. 2006); Caldwell v. Barnes, 154 S.W.3d 93, 96–97 (Tex.
2004) (stating that proof of non-service will conclusively establish third element of
bill of review).
We review the denial of a bill of review for an abuse of discretion. Davis v.
Smith, 227 S.W.3d 299, 302 (Tex. App.—Houston [1st Dist.] 2007, no pet.). To
determine whether a trial court abused its discretion, we must decide whether the
trial court acted without reference to any guiding rules or principles; in other
words, we must decide whether the act was arbitrary or unreasonable. Low v.
Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v. Cummings, 134 S.W.3d 835,
838–39 (Tex. 2004). Under the abuse of discretion standard, challenges to the
sufficiency of the evidence are not independent grounds of error but are relevant
factors in assessing whether the trial court abused its discretion. See Edwards v.
Mid-Continent Office Distribs., L.P., 252 S.W.3d 833, 835 n.6, 836 (Tex. App.—
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Dallas 2008, pet. denied); El Paso Cnty. Hosp. Dist. v. Gilbert, 64 S.W.3d 200,
203–04 (Tex. App.—El Paso 2001, pet. denied).
The return of citation states that Ronald was personally served at 11:57
a.m. on August 30, 2004. The recitations in the return are prima facie evidence
of the facts recited in the return. See Primate Constr. v. Silver, 884 S.W.2d 151,
152 (Tex. 1994). Ronald, however, testified that he was never served with the
citation. In and of itself, Ronald’s testimony is insufficient to establish non-
service because the recitations in the return “carry so much weight that they
cannot be rebutted by the uncorroborated proof of the moving party.” See id.;
see also Caldwell, 154 S.W.3d at 97 n.3 (“At trial, the testimony of a bill of review
plaintiff alone, without corroborating evidence, is insufficient to overcome the
presumption that the plaintiff was served.”).
Gregory argues that he corroborated Ronald’s testimony with evidence
elicited from Morris Carrejo. Carrejo testified that like Ronald, he is employed as
a code enforcement supervisor for the City of Fort Worth and that Ronald was “in
the office” on August 30, 2004, because “[b]eing a Monday, that’s a catch-up
day, and you usually stay in the office for sure and [Ronald] has lunch pretty
much on Mondays there at the office.” But Carrejo clarified on cross-examination
that he was testifying about what he normally knows to be the routine at work.
He explained that he had no recollection of Monday, August 30, 2004, and that
he could not account for Ronald’s whereabouts that day.
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The trial court also admitted a document evidencing Ronald’s “Individual
Record of Absence from Duty,” which sets out the dates that Ronald was absent
from work and for how long. Gregory appears to argue that the document
corroborated Ronald’s testimony about lack of service because it did not show
that Ronald was out of the office on August 30, 2004, and, therefore, amenable
to service away from work. Although non-service may certainly be corroborated
by circumstantial evidence, see Sanders v. Harder, 148 Tex. 593, 597, 227
S.W.2d 206, 209 (1950), Carrejo explained that the document reflected Ronald’s
absences for personal reasons only; it did not account for those times when
Ronald was out of the office for a business-related activity. Indeed, Ronald
acknowledged that his job requires him to be out of the office from time to time,
that he takes lunch breaks, and that he could not account for his whereabouts on
August 30, 2004. In addition to this testimony, Ronald testified that he used to be
one of the partners in Hit City; and Gregory explained that in August 2004,
several teenagers, one being his daughter, Ronald’s niece, ran Hit City. The
return of citation does not identify where Ronald was served, although Hit City’s
address is handwritten on the citation, but it does indicate that Ronald was
served at 11:57 a.m. In light of all of this, the trial court could have reasonably
concluded that the document evidencing Ronald’s absences from work did not
corroborate his testimony of non-service on August 30, 2004.
Gregory argues that additional corroboration evidence consists of his
testimony that he made arrangements to pay for delinquent business personal
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property taxes when he received notice that they were overdue. According to
Gregory, he “had a history of taking responsibility for payment of taxes,
suggesting his awareness of the risk of ignoring a tax suit in that it might lead to
the tax sale of the Mansfield Highway property.” Gregory’s testimony that he
paid past-due business taxes is circumstantial evidence that he pays taxes when
they are overdue, not evidence, circumstantial or otherwise, that Ronald was not
served in the underlying delinquent tax suit.
The evidence that Gregory relies upon to demonstrate corroboration either
circumstantially corroborated some fact relevant to a matter other than non-
service upon Ronald or was simply no evidence of corroboration. An abuse of
discretion does not occur when the trial court bases its decisions on conflicting
evidence and some evidence of substantive and probative character supports its
decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009); Butnaru
v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002). We hold that the trial court
could reasonably have concluded that Gregory did not present sufficient
corroborating evidence that Ronald was not served in the tax suit. Accordingly,
we hold that the trial court did not abuse its discretion by denying Gregory’s bill of
review. We overrule Gregory’s first issue.
Having determined that Gregory failed to corroborate Ronald’s testimony
about non-service, we also overrule Gregory’s third issue, in which he argues
that the trial court abused its discretion by denying his bill of review on the basis
of estoppel.
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IV. SERVICE EFFECTIVE UPON HIT CITY
In his second issue, Gregory argues that even if we overrule his first issue,
service upon Ronald “would not have bound [Gregory] with the underlying
judgment in the tax suit” because by August 2004, Ronald was no longer a
partner of Hit City nor affiliated with the business in any capacity.
Ronald acknowledged that a warranty deed filed of record in Tarrant
County showed that Hit City—a Texas general partnership comprised of Gregory
and Ronald—took ownership of the property at 3354 Mansfield Highway in June
1994. However, Ronald and Gregory testified that Ronald “gave” his partnership
interest in Hit City to Gregory at some point before August 2004, and Gregory
testified that Hit City was now a sole proprietorship. Nevertheless, Ronald
agreed that a records search to determine who owned the property at 3354
Mansfield Highway would reveal that the property is owned by the Hit City
partnership, which, according to the deed, included Gregory and Ronald. Thus,
the issue is whether service upon Ronald, a former partner in Hit City, was
sufficient to authorize the judgment against Hit City because the deed filed of
record for the property located at 3354 Mansfield Highway identified Ronald as a
partner of Hit City, the owner of the property.
Appellees filed the underlying suit against Hit City to recover delinquent
ad valorem taxes. An ad valorem tax is a tax on property at a certain rate based
on the property’s value. Tex. Mun. League Intergovernmental Risk Pool v. Tex.
Workers’ Comp. Comm’n, 74 S.W.3d 377, 387 (Tex. 2002). Determining
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ownership of property is a pivotal issue in a suit to recover delinquent taxes,
whether the taxing unit seeks personal liability, foreclosure of a tax lien, or both.
See Tex. Tax Code Ann. § 33.41(a) (West 2008) (“At any time after its tax on
property becomes delinquent, a taxing unit may file suit to foreclose the lien
securing payment of the tax, to enforce personal liability for the tax, or both.”).
For example, property taxes are “the personal obligation of the person who owns
or acquires the property on January 1 of the year for which the tax is imposed.”
Id. § 32.07(a) (West 2008). Moreover, a petition initiating suit to collect
delinquent property taxes is sufficient if it alleges that the person sued owned the
property on January 1 of the year for which the tax was imposed if the suit seeks
to enforce personal liability, or that the person sued owns the property when the
suit is filed if the suit seeks to foreclose a tax lien. Id. § 33.43 (a)(7), (8) (West
2008). Also, in a suit to recover delinquent taxes, the tax code permits a
defendant to raise the affirmative defense of non-ownership of the subject
property. Id. § 42.09(b)(1) (West 2008).
Here, Ronald may have transferred his partnership interest in Hit City to
Gregory at some point before August 2004, but the deed filed of record continued
to show (even at the time of trial) that Ronald was a partner in Hit City, the record
owner of the property located at 3354 Mansfield Highway. Gregory offered no
evidence that he somehow noticed or even otherwise documented the
dissolution of the Hit City partnership such that Appellees could ever have
discovered the change in the partnership’s status. That being the case, just as a
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party who performs a search of property records is entitled to rely on the
recitations contained in those records when purchasing a property, we must
conclude that Appellees—taxing units seeking to recover delinquent ad valorem
taxes from Hit City, the record owner of the property located at 3354 Mansfield
Highway—were entitled to rely upon the recitations contained in the deed filed of
record, indicating that Ronald was a partner in Hit City, when attempting to
determine ownership of the property for purposes of effecting service of process.
As citation served on one member of a partnership authorizes a judgment
against the partnership, see Tex. Civ. Prac. & Rem. Code Ann. § 17.022 (West
2008), we hold that service upon Ronald was effective to authorize a judgment
against Hit City. We overrule Gregory’s second issue.
V. DUE PROCESS
Citing Jones v. Flowers, 547 U.S. 220, 126 S. Ct. 1708 (2006), Gregory
argues in his fourth issue that he was denied due process because Appellees
failed to provide him with appropriate notice of the tax delinquency and tax sale.
In Jones, the Supreme Court held that when notice of a tax sale is mailed to the
owner and returned undelivered, the State must take additional reasonable steps
to provide notice before taking the owner’s property. Id. at 223, 234, 126 S. Ct.
at 1718. Jones is inapposite because the taxing entity there knew that its notice
to Jones that his taxes were delinquent and that his property was subject to
public sale had been returned unclaimed. Id. at 223–24, 126 S. Ct. at 1712. The
Court explained that “we have never addressed whether due process entails
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further responsibility when the government becomes aware prior to the taking
that its attempt at notice has failed.” Id. at 227, 126 S. Ct. at 1714. In this case,
service of process was successfully effected upon Ronald, and Appellees
subsequently took a default judgment against Hit City, as they were entitled to
do. See Tex. R. Civ. P. 107, 239. Thus, unlike the taxing entity in Jones,
Appellees had no indication that their notice had failed. We overrule Gregory’s
fourth issue.
VI. CONCLUSION
Having overruled all of Gregory’s dispositive issues, we affirm the trial
court’s order denying Gregory’s petition for equitable bill of review.
BILL MEIER
JUSTICE
PANEL: LIVINGSTON, C.J.; MEIER and GABRIEL, JJ.
DELIVERED: May 24, 2012
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